Tan Sri Tajudin Ramli’s claim in his court document that he was directed by the two Tuns (former premier Mahathir and his then economics tsar, Daim Zainudin) to buy shares in Malaysia Airlines (MAS) as a form of ‘national service’ is nothing less than a bombshell.
According to Tajudin, the transaction was to help Bank Negara recover from foreign exchange losses in 1994. It was however disguised as a commercial deal because the government did not want to undermine investor confidence or create undue public anxiety, he said, adding that he was only a nominee/agent of the government in MAS.
Tajudin alleged that the two Tuns had repeatedly assured him that he would not suffer any losses or be held liable for anything arising from his purchase of MAS shares. This special arrangement was to be a ‘secret’, he claimed, although the Official Secrets Act was apparently not invoked. But he was spilling the beans now because the government had not honoured the agreement, he said.
If his claim is true, it explains why he bought, through his firm Naluri, a 32 per cent stake in MAS at RM8 per share in 1994, well above the then market price of RM3.50. It was hailed as the biggest ever privatisation exercise at that time.
After the 1998 financial crisis, the government bought back the MAS stake from Naluri at RM8 per share, when the market price was about RM3.
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The whole expose raises a number of critical questions relating to transparency, accountability and, of course, ‘national service’ involving tycoons and cronies.
- First, did Bank Negara really need help to recover from the forex losses ranging from RM10 billion to RM30 billion? How much did it actually lose and who was responsible?
- What was Tan Sri Nor Mohamed Yakcop’s precise role in the forex affair? How did he end up as second Finance Minister after the forex affair?
If Bank Negara was really in such dire straits, why was there a need to keep it secret from the public? Why wasn’t its critical financial position reflected in its accounts submitted to Parliament?
- On what basis did the banks approve loans amounting to RM1.8 billion to facilitate Tajudin’s purchase of MAS shares when the purchase price was much higher than the market price?
- Who actually approved the buy-back of MAS shares at RM8, well above the market value? Was the Cabinet involved in this decision? Or was it solely the two Tuns?
- Which other tycoons have been roped in for other forms of compulsory – and secret – ‘national service’? Is this the original form of ‘khidmat negara’?
To get to the bottom of all of this requires nothing less than a royal commission of inquiry headed by a respected judge of impeccable integrity with a broad scope to probe this entire affair. The commission should probe, among other things, how the bank loans were approved and who in the cabinet authorised such transactions.
Since we are into royal commissions, we further propose another body to investigate the corruption allegations against certain judges, which have never been fully probed, as asserted by at least two other former senior judges.
Meanwhile, the two Tuns, who have since apparently fallen out with each other, have a golden opportunity to get together again. After all, they have a lot of explaining to do.
Aliran executive commitee
6 July 2006
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